Asked by
Missio-Dei Otineru
on Nov 12, 2024
Verified
Existing fixed manufacturing overhead costs are not relevant in deciding whether to accept a special order.
Fixed Manufacturing Overhead
Fixed manufacturing overhead consists of expenses that do not change with the level of production, such as rent, depreciation, and salaries of permanent staff.
Special Order
A one-time order that is not part of the company's usual ongoing operations, often requiring a deviation from standard pricing and production procedures.
- Distinguish between relevant and irrelevant costs in various decision-making scenarios.
Verified Answer
TM
Learning Objectives
- Distinguish between relevant and irrelevant costs in various decision-making scenarios.